Mr. and Mrs. Boyce bought a house for $96,000 in 1995. Real estate values in their area increase approximately 4% each year. What was the value of the house in 2007?
Well, let's put on our real estate glasses and crunch some numbers, shall we?
If the house was bought for $96,000 in 1995 and real estate values increase by about 4% each year, we need to calculate the value of the house in 2007.
So, we'll start with the initial price of $96,000. We'll then apply the 4% increase for each year from 1995 to 2007. Grabbing our math wands...
1996: $96,000 + 4% = $99,840
1997: $99,840 + 4% = $103,785.60
1998: $103,785.60 + 4% = $107,863.42
1999: $107,863.42 + 4% = $112,104.24
2000: $112,104.24 + 4% = $116,517.81
2001: $116,517.81 + 4% = $121,115.64
2002: $121,115.64 + 4% = $125,909.98
2003: $125,909.98 + 4% = $130,914.78
2004: $130,914.78 + 4% = $136,144.59
2005: $136,144.59 + 4% = $141,614.23
2006: $141,614.23 + 4% = $147,339.32
2007: $147,339.32 + 4% = $153,336.15
So, drum roll please... In 2007, the value of Mr. and Mrs. Boyce's house would be approximately $153,336.15. Keep in mind though, the real estate market can be as unpredictable as a clown riding a unicycle!
To find the value of the house in 2007, we need to calculate the annual increase in value and add it to the initial purchase price.
First, let's calculate the increase in value per year. We know that the real estate values increase approximately 4% each year, which can be expressed as 0.04 as a decimal.
To find the increase in value, we multiply the initial price by the annual increase rate:
Increase in value = 96,000 * 0.04 = 3,840
Now, let's calculate the value of the house in 2007 by adding the increase in value to the initial price:
Value in 2007 = 96,000 + 3,840 * (2007 - 1995)
Since we want to find the value in the year 2007, which is 12 years after 1995, we can substitute the values:
Value in 2007 = 96,000 + 3,840 * 12 = 96,000 + 46,080 = $142,080
Therefore, the value of the house in 2007 was $142,080.
To calculate the value of the house in 2007, we need to use compound interest. First, let's calculate the annual increase in the value of the house. We know that the value increases by approximately 4% each year.
Step 1: Calculate the annual increase
Annual Increase = (4/100) * $96,000
Annual Increase = $3,840
Now, we can calculate the value of the house in 2007 by adding the annual increases to the initial value of $96,000 for each year from 1995 to 2007.
Step 2: Calculate the value in 2007
Value in 2007 = $96,000 + (12 years * $3,840 per year)
Value in 2007 = $96,000 + $46,080
Value in 2007 = $142,080
Therefore, the value of the house in 2007 is $142,080.